Energy giant gives £251m to shareholders while hiking bills 8 per cent
SSE denies putting profits before customers as it reveals big profits
SSE set out plans to hand out £251m to shareholders just two days before the energy giant hits its 4.4 million customers with an average price increase of 8.2 per cent.
The gas and electricity provider announced it had made a £354m profit in just six months – which is down 11.7 per cent on the same period last year – and so SSE handed its investors an above-inflation 3.2 per cent rise in dividends.
The 26p interim payout is more than three times the dividend paid by SSE in 2000 when average bills were £710. And SSE's latest price hike, which comes into force on Friday, will take average dual fuel bills to £1,380.
But SSE's head of retail, Will Morris, dismissed claims that SSE values shareholders more than customers, saying: "Nothing could be further from the truth." He pointed out SSE's energy supply business fell to a £115.4m operating loss from a £48.3m profit last year, and added: "The loss shows that we have not been overcharging our customers. Although we regret having to increase prices, it was unavoidable."
SSE said its "first financial responsibility to its shareholders is to remunerate their investment through the payment of dividends". The provider did, however, join its Big Six rivals as well as smaller providers in saying it would cut customers' prices if the Government slashed green levies.
Its chief executive, Alistair Phillips-Davies, said the hike could fall by half to about 4 per cent, if the industry's forecasts of Government cuts materialised. His comments came as Co-operative Energy trimmed the 4.5 per cent price rise it announced last month to 2.5 per cent. It was in response, the firm said, "to the clear indication the Government has given that it will remove green taxes on gas and electricity bills".
Energy firms have piled on the pressure for a green tax cut from the Chancellor, George Osborne, ahead of his Autumn Statement in December. British Gas's owner Centrica said: "If environmental and social levies are taken off the bill then the benefit will be passed to our customers." Meanwhile, E.ON's UK business yesterday posted a £227m pre-tax profit, up from £194m a year ago, for the three months to September. The group, which is expected to lift its gas and electricity prices by 6.6 per cent, warned: "It is likely we will need to pass on some of these increases in costs to our customers."
EDF this week said its bills will go up by 3.9 per cent, although it did include a threat to the Government that it would "review" its prices if ministers did not cut green levies.
The National Audit Office, the public spending watchdog, warned households energy and water bills will soar, with costs rising by £700 a year by 2030. Sainsbury's chief executive Justin King criticised energy firms, saying: "We cannot see why those profits are deserved." However, the store's gas and electricity division, Sainsbury's Energy, is putting bills up by about 10.4 per cent.
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